Russian state-controlled giants Gazprom and Rosneft have been handed monopoly rights to all hydrocarbon developments on the Russian shelf, Natural resources Minister Yuri Trutnev has confirmed.
Russia will consider relaxing laws regulating foreign participation in offshore projects in a bid to attract investment from abroad, Natural Resources Minister Yuri Trutnev said.
“We will look into this issue (laws regarding foreign investment) first of all in relation to offshore exploration. We believe that state regulation creates many obstacles for exploration,” Trutnev told Reuters on the sidelines of an economic forum.
The minister also blamed state-controlled energy giants Rosneft and Gazprom , which are the only two players carrying out offshore exploration in Russia at the moment, for underinvestment.
Underinvestment? Here’s what I said in April 2008 when the new law was announced:
Without a doubt, Russia will still attract inward invesment, enormous amounts of it, and much of this will be into its oil and gas sector. But this investment will come at an increased cost, be it in the form of upfront payments or reimbursable terms on major projects, higher interest rates from banks and financial institutions, or more stringent guarantees and performance criteria. At a time when Russia is going to be shopping around for $2.6 trillion of investment, it could probably have handled things better this last few years.
Perhaps Mr Trutnev has been reading this blog? Or has economic reality just bitten?